Oil prices hit highest level since July 2015 on re-balancing optimism

Oil prices have increased while global benchmark Brent continues to trade at 26-month high levels following reports of an unexpected fall in United States crude stocks.

Brent crude hit a near two-year high of $59.49 on Tuesday, before sliding to $59.01 a barrel. Prices rebounded to end the session in the black, up almost 0.3%.

Ingham's group reported Texas crude oil production was about 5.7 percent higher than it was past year. Resistance on crude oil is seen near the April highs at 53.67.

"U.S. crude is becoming more and more popular", said Wang Pei, an executive at the trading unit of China Petroleum and Chemical Corp., the world's biggest refiner, that's known as Sinopec.

New York's NYMEХ (New York Merchantile Exchange) is a U.S. futures market founded in 1882.

However, not everyone agrees that there is further room to run for oil prices, and just because oil has rallied in the past few weeks, does not mean that greater price increases are a foregone conclusion. This rise in oil inventories could be attributed to the damages caused to refineries on the US Gulf Coast during Hurricane Harvey.

Kirkuk, controlled by the Kurdish forces, produces close to 400,000 barrels a day, which makes up nearly 10 percent of total Iraqi oil production. The benchmark for US oil is now hovering above $52 a barrel.

Refinery crude runs increased by 1 million barrels per day as utilization rates rose by 5.4 percentage points to 88.6 percent of total capacity, its highest rate since Harvey hit on August 25, EIA data showed. Some 500,000 barrels of oil per day are exported out of Kurdish Iraq every day.

The 14-member Organization of the Petroleum Exporting Countries, led by No. 1 oil exporter Saudi Arabia, met in Vienna on Friday with the world's largest crude producer Russian Federation to discuss a range of price support options for oil.

Traders have also attributed the uptick to some demand from China's independent refineries keen to utilise their crude import quotas before they expire at the end of the year. Total volume traded was about 17% below the 100-day average.

U.S. crude stocks fell by 761,000 barrels last week as refineries boosted production, while petrol inventories increased and distillate stocks fell, data from industry group American Petroleum Institute showed on Tuesday, in contrast with market expectations. Distillate inventories fell by 4.527 million barrels.

Gasoline stocks rose 1.1 million barrels, compared with analysts' expectations in a Reuters poll for a 921,000-barrel drop.

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